Unemployed Lose Fallback Options

By

Sara Murray

Updated April 3, 2009 12:01 a.m. ET

LEWISTOWN, Pa. -- The growing ranks of unemployed Americans are turning to the traditional fallbacks -- retail, restaurants, customer service -- to ride out a rough economy. The bad news is job openings there are growing scarce, too.

Nation's Unemployed: February

Click on the image for state-by-state unemployment data from the Bureau of Labor Statistics, with year-over-year change in percentage points.

Widespread "trading down" is sparking a fight for low-wage jobs that employers once struggled to fill. Mark Hall, 24 years old, of Alexandria, Pa., lost his $12-an-hour gig as a videographer when his employer folded and is now looking for anything to make ends meet.

"Finding a regular job, not even in my field, is very challenging," said Mr. Hall. "Even working for Lowe's, I'd settle for that, and I have a four-year degree."

Last week, Mr. Hall joined more than 500 people at a job fair in Lewistown, a fading manufacturing hub. Hardware and appliance retailer Lowe's was among 30 employers recruiting, down from 46 last year, and looking for mostly part-time and seasonal employees.

Despite what objectives they may have put atop their resumes, when asked to describe the work they really wanted, the job seekers largely had the same goal: "I'll take anything right now."

In many cases, that desperation means that even educated workers must trade down to jobs below their potential and with lower pay. That results in painful, long-term effects, from hurting their own career advancement to displacing those with less education or experience.

ENLARGE

Job seekers line up to apply for positions at an American Apparel store April 2 in New York City.
Getty Images

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Employment is down in every industry except health care, education and government. In the areas Americans could count on to get through past recessions, February's employment data show administrative and support services jobs were down 11%, retail trade fell 4% and jobs in food services and drinking establishments dropped 1%.

Web site Monster.com has seen listings for work such as food preparation and service fall by more than a quarter, while jobs in sales and administrative support dropped by more than a third from a year earlier.

The government gives its latest snapshot of the job market Friday morning, and economists expect it will report another 675,000 jobs or more were lost in March, and the jobless rate rose sharply from February's 8.1%.

Another gauge of joblessness -- which tracks the unemployed, those who aren't looking for work but want it, and part-timers who want full-time jobs -- hit 14.8% in February, up from 9% a year earlier. That underscores how many people are searching for work or merely settling for something less than satisfactory.

ENLARGE

Lewistown -- about 55 miles west of Harrisburg, with a population of about 9,000, according to the 2000 census -- had a jobless rate in January of 9.9%, nearing the double digits that economists say the U.S. is likely to see by later this year or in 2010. Rebecca and Dave Yohn both attended the fair to search for something to make up for the manufacturing jobs they lost when their factories either shut down or downsized. He worked for a cabinet maker; she sold seats for automobiles.

No longer relying on manufacturing, the Yohns were looking for anything to help cover their property taxes and utility bills. "You do what you have to do," Mrs. Yohn said. "If I could get a painting job or something to get by...that would be terrific."

Nationwide, companies with low-wage jobs report a surge of such applicants. Noodles & Co., a Colorado-based restaurant chain, has seen a 40% increase in applications for all types of positions -- cooks, cashiers, corporate managers -- across more than 200 restaurants, said Heath Grantham, manager of staffing and recruiting. From January to late March, that worked out to more than 23 applicants for each open position.

Layoffs Pile Up

See some of the largest layoffs in the fourth quarter of 2008 and the first quarter of 2009.

Phillips Seafood Restaurants experienced large turnouts at two recent restaurant open houses in Baltimore and Washington, D.C. The open houses, which usually attract 40 or 50 applicants, pulled in 300 in Washington and 165 in Baltimore. Savannah Red restaurant in Charlotte, N.C., received nearly 200 applications for a part-time server job that, six months ago, drew only five applicants.

Even though the recession is bad for business, it can be good for those who are hiring. During the boom years, restaurants and retailers struggled to find Americans willing to work at low-wage jobs. Seasonal employers, such as lifeguards and camp counselors, often recruited overseas to fill open positions.

For workers such as Mr. Hall, low-wage jobs look a lot more desirable now. He needs to pay the bills and dreams of starting his own videography business. After searching unsuccessfully for video-production and media work, he is ready to consider just about anything. "I've applied to about 25 jobs," he said, "and I either haven't heard back or been flat out said 'no' to."

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